The IRS has released the 2023 retirement plan limits. Tax year 2023 will contain a significant increase in contribution limits for employees participating in a 401(k) plan.
401(k) 2023 Plan Limits
The new maximum 401(k) employee contribution limit is increasing from $20,500 in 2022 to $22,500 in 2023. If you are over the age of 50 there is an additional catch-up contribution limit increase from $6,500 in 2022 to $7,500 in 2023. This nets to a potential $30,000 total 401(k) contribution for those over the age of 50 in tax year 2023.
IRA and Roth IRA 2023 Limits
IRAs and Roth IRAs will also see a significant increase in 2023 contribution limits from $6,000 in 2022 to $6,500 in 2023. The catch-up contribution limit for those over the age of 50 will remain unchanged at $1,000. Taxpayers should be prepared to take advantage of these changes.